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Fundamental types of organizational structure

Organizations
can be described in terms of how their parts are put together and operate.

Researchers
who study the concepts of organizational structure and function frequently
describe organizations in terms of several important dimensions:
decentralization versus centralization, tall versus flat structure, unity of
command and chain of command.

·Decentralization
versus centralization

oCentralization:

A
structure depends on the organization's objectives and strategy. In a
centralized structure, the top layer of management has most of the decision
making power and has tight control over departments and divisions. There is
relatively less participation by employees in a variety of decisions.

§Advantages of Centralization:

1.
Closer control of operations

2.
Uniformity of policies, practices, and procedures

3.
Better use of centralized, specialized experts

oDecentralization:

Decentralization
is the degree to which decision making occurs at the lower level of an institution.
In decentralized structure, the decision making power is distributed and the
departments and divisions may have different degrees of independence,

Example;

A company
such as Proctor & Gamble that sells multiple products may organize their structure.
So that groups are divided according to each product and depending on geographical
area as well.

Decentralized
organizations are characterized by less monitoring or checking on decisions
made by employees.

Large,
complex organizations often require a taller hierarchy. In its simplest form, a
tall structure results in one long chain of command. Similar to the military.
As an organization grows, the number of management levels increases and the
structure grows taller. In a tall structure, managers form many ranks and each
has a small area of control. Although tall structures have more management
levels than flat structures, there is no definitive number that draws a line
between the two.

oFlat Organizational Structure

Flat
structures have fewer management levels, with each level controlling a broad
area or group. Flat organizations focus on empowering employees rather than
adhering to the chain of command. By encouraging autonomy and self-direction,
flat structures attempt to tap into employees' creative talents and to solve
problems by collaboration.